Chairman Larry Ellison, Silicon Valley’s longest-running showman, revealed that contracted but not yet recognised revenue has exploded to $455 billion. That is more than triple the level reported only three months ago and he reckons it will soon pass half a trillion.
The money is being driven by demand for artificial intelligence from the likes of OpenAI. Oracle is now predicting its cloud infrastructure revenue will climb to $114 billion in the 2029 fiscal year, up from just over $10 billion in May.
If that comes off, Oracle's revenue could more than double inside three years. The company’s stock is already up 45 per cent this year and then surged another 40 per cent on the news, pushing its market value to about $950 billion. According to FactSet, it has not seen a single-day leap like that since the 1990s.
Ellison might have over egged the pudding with the comparison. Even Nvidia avoids making forecasts beyond one quarter because it knows the risks of betting on a market moving this fast. Microsoft, Google and Amazon will not even split out AI revenue in their results.
Oracle’s bullish tone is pure Ellison, but chief executive Safra Catz agrees. The firm built its reputation shifting database software that most would consider boring. Now it is hitching itself to the AI rocket in a way that leaves little margin for error.
Turning those obligations into revenue will take more than showmanship. Oracle must build datacentres, secure permits, and find enough graphics chips, which remain scarce and in hot demand.
Analysts point out Oracle has strengths of its own. Scotiabank analyst Patrick Colville praised its “crème-de-la-crème technical expertise, access to capital, deep support from Nvidia, and independence” which he said positioned it well for the “supernova of demand” in AI training and inference.
Even so, Oracle is already priced like a high-growth darling. Its shares are trading at 48 times forward earnings. That means the company’s future is nailed to AI in a way its rivals are not. Microsoft can still shift office licences if the AI bubble bursts.
